[quote=carlsbadworker]I think this was gzz’s point a while ago. What worries me that it does not factor in the new “cold-war” which means globalization as we knew it has ended.
Krugman noted that rates drifted towards zero over the course of the three decades leading up to the pandemic, but that didn’t result in serious inflation.
He suggested the “natural rate of interest” may have dropped due to lower investment demand, reflecting tepid growth in the US workforce and a dearth of innovations since the 1990s. Those trends potentially weighed on investment in homes, appliances, office space, and new equipment, he said.
Meanwhile, Krugman argued that inflation only spiked during the pandemic because government aid shored up consumers’ purchasing power. Meanwhile, lockdowns and supply-chain disruptions curtailed the economy’s productive capacity, pushing up prices.[/quote]
Krugman is an idiot because he does not consider the role of demographics,… basically because of the population curve (i.e. the number of baby-boomers, the number of gen-x, the number of millennials, etc.) it is possible to somewhat predict trends such as interest rates
said another way looking at global demographics, we can expect much higher interest rates not on here in the USA, but also around the world (which is going to cause lots of interesting economic responses)
FWIW a good tome on the topic of demographics and how it will affect an economy is, “the end of the world is just the beginning” by Peter Zeihan
